from the nickel-and-dime-you-to-death dept

There are certainly some similarities between the airline and broadband industries. Both are pampered, uncompetitive markets suffering from regulatory capture that allows them to literally write the laws that govern their respective business segments. Both insist that constantly skyrocketing prices are justified by an ever-improving "customer experience," while the actual customer experience continues to get worse as companies consolidate and competitors dwindle. Taking their cues from banking "innovations" in the 80s, both industries have also become obsessed with screwing over their customers via the use of increasingly sneaky fees.

This New Yorker article by neutrality godfather Tim Wu makes this rather clear, noting that the airline industry made $31 billion largely from fees in 2013, a number that's sure to have skyrocketed in 2014 as the airlines get increasingly "creative" in below-the-line charges for basic amenities that used to just be part of standard service. Some friends of mine recently rode Allegiant Air, and told me the company charged a $5 fee just to print your boarding pass on top of the usual assortment of annoying fees (it's worth noting their beverages, including water, also aren't complimentary).

While the airlines like to frame this as an increase in consumer choice (hey, you can choose to not enjoy a pillow!), Wu aptly notes how this approach to price discrimination in less competitive markets consistently results in making your customers more miserable:

"But the fee model comes with systematic costs that are not immediately obvious. Here’s the thing: in order for fees to work, there needs be something worth paying to avoid. That necessitates, at some level, a strategy that can be described as “calculated misery.” Basic service, without fees, must be sufficiently degraded in order to make people want to pay to escape it. And that’s where the suffering begins. The necessity of degrading basic service provides a partial explanation for the fact that, in the past decade, the major airlines have done what they can to make flying basic economy, particularly on longer flights, an intolerable experience."

Earlier this year, Mike had already pointed out more than a few similarities between the broadband and airline industries, and how this behavior is closely tied to the net neutrality debate. Wu doesn't even mention broadband, though both industries feature oligopolies that abuse the lack of competition to keep the bar at ankle height to cut costs, then enjoy charging consumers more if they'd like to be less miserable. The overall transaction costs (physical, mental and monetary) of such a model become absurdly high, reducing the utility of the service and incentivizing an approach where consumers have to pay to elevate themselves beyond intentionally poor or constrained service, resulting in the flying experiences most of us know and love today.

The broadband industry isn't much different (something Stacey Higginbotham pointed out recently as well). That consumers are being given amazing new levels of choice and flexibility is AT&T's justification for the company's Sponsored Data effort, which erects entirely arbitrary consumer usage caps, then charges companies an extra fee if they'd like to bypass them. Likewise, T-Mobile argues that exempting only the biggest music services from the company's usage caps delivers great benefits to the consumer (despite tilting the playing field against smaller operators). While the net neutrality conversation (and the feeble rules we've seen so far) focuses on outright blocking of websites or throttling of connections or services (even though even the worst-behaved ISPs now avoid both), the real danger at the moment is the all-too-clever efforts that constrain the user while pretending to offer greater freedom.

Like the airline industry, in regulatory conversation there's a tendency to see these efforts as simple pricing creativity, when the only creative thing about them is in convincing consumers that less is more. Without meaningful network neutrality rules (in the stark absence of real competition), we're creating a slippery slope of intentionally hamstrung services where your only option is to pay a steep premium if you'd like to be treated even remotely like a human being.

The short version is that you board alternate rows at a time, starting with the window seats on one side first, then on the other, then a similar process with middle seats and aisle seats.

What does any of this have to do with net neutrality? Well, Vox.com recently had an article about the Steffen method, along with a variety of other airplane boarding methods, and notes that the way we board airplanes makes absolutely no sense. In fact, the report suggested that (other than Southwest Airlines -- which lets passengers just pick their own seat) most airlines pick the absolute worst ways to board, massively increasing the time needed for the boarding process.

So here's the question: why haven't airlines adopted these better methods, instead sticking with what are clearly the worst methods? Everyone seems to agree that speeding up turnaround times could save airlines a tremendous amount of money. Steffen himself has estimated that faster turnaround could save the airline industry over a billion dollars. So you'd think they'd do that. But...they don't. And Vox points out why:

One possible answer is that the current system actually makes them more than they'd save by switching. As Businessweek pointed out, airlines often allow some passengers to pay extra to board early and skip the general unpleasantness. If the entire boarding process was faster to begin with, many people might not pay extra to skip it.

For passengers, though, this makes no sense. Most of us are waiting in line longer than necessary, and those who pay extra are sitting on planes longer than necessary. No one is getting to their destinations any faster, and everyone is paying higher base prices for tickets, because airlines have to pay extra to the crew for their time used during these delayed turnarounds.

In fact, that same BusinessWeek article notes that boarding times are getting much longer over time, and also details how various airlines seem to revel in making the whole process as confusing and annoying as possible -- while offering fees to folks who want to "upgrade" to a better experience.

And that, finally, takes us to the net neutrality connection. Broadband providers insist they need to do things like prioritize some traffic in order to deal with network congestion, but that's bogus. It's only the non-technical management who makes those claims. Ask the technology guys, and they will quickly say that basic upgrades can easily accommodate all traffic. But the broadband providers are now like the airlines. They could very easily offer a better overall service, but they're quickly recognizing that by offering a crappy service, they can charge more to get a select few to pay up for a "fast lane" approach. So the incentives are totally screwed up. There's little incentive for airlines to improve the boarding process, so long as having such a crappy process leads people to pay extra fees to avoid the crappy process.

In the broadband space, it's even worse, because there's even less competition, so there are even fewer incentives for the broadband providers to actually do the necessary upgrades. Instead, they have all the incentive in the world to make their broadband connections purposely inefficient, to pressure people into paying more. Is it really any wonder that Netflix streaming quality was so terrible until Netflix suddenly agreed to start paying up.

Just like the airlines, broadband providers have little incentive to actually build what's best, and plenty of incentive to degrade the general experience.

from the big-brother-is-watching dept

New York, and many states in the northeast and midwest, use an RFID toll-paying solution called E-ZPass (the system works in multiple states -- but not all, which is why, for example, you can't use the E-ZPass on California's Fastrak system). Ever since E-ZPass came into existence, some have expressed concerns that the tags would be used for tracking, rather than just for more convenient and efficient toll-paying. And, in fact, the toll-paying records have been used in a variety of legal cases, from catching an official who falsified time sheets to being used as evidence in divorce cases. But all of those still involved using the records at the actual tolls, where everyone knows the tags are being read.

However, it turns out that New York City has had an ongoing program to surreptitiously scan the tags in a variety of places supposedly for monitoring traffic. Indeed, you could see how that sort of traffic information might be useful, though these days with many other forms of traffic monitoring systems out there, it's probably a lot less necessary than before. But this was only discovered because a hacker going by the name Puking Monkey (one assumes this was not his given name) got suspicious and hacked up an E-ZPass to light up and make a sound whenever it was read. Then he drove around Manhattan, and voila, the tag kept going off:

As Kash Hill's article at Forbes notes, this has been going on for years, though, the various agencies involved have been rather quiet about it, and (perhaps most importantly) this type of usage does not appear to be disclosed in the terms and conditions for the E-ZPass. Oops.

The technology company that makes the devices insists that it's not being used for any surveillance:

“The tag ID is scrambled to make it anonymous. The scrambled ID is held in dynamic memory for several minutes to compare with other sightings from other readers strategically placed for the purpose of measuring travel times which are then averaged to develop an understanding of traffic conditions,” says TransCore spokesperson Barbara Catlin by email. “Travel times are used to estimate average speeds for general traveler information and performance metrics. Tag sightings (reads) age off the system after several minutes or after they are paired and are not stored because they are of no value. Hence the system cannot identify the tag user and does not keep any record of the tag sightings.”

Of course, even if that is true today, that doesn't mean it will always be true. We're already well aware of how the NYPD is known for the extreme lengths it will go in terms of surveillance, including the fact that it's set up its own intelligence division that many say rivals the intelligence operations of entire nations. Since the folks behind E-ZPass didn't seem to think it was necessary to tell people that their devices would be used for traffic monitoring, how likely is it that anyone would be told if it was used for surveillance as well?

from the brilliantly-stupid dept

Electronic toll systems have become quite popular around the country -- and have been proven time and time again to be amazingly successful on both sides of the equation: they help ease traffic by speeding cars through toll booths, and they greatly decrease the costs involved in managing a toll system, by decreasing the number of toll-takers necessary. In fact, many states offer incentives for using such systems -- including here in California, where the tolls are cheaper if you're using FastPass (what it's called here). On the east coast, many different states have all agreed to use a single system, called EZPass, which I remember being quite popular (and useful) in New York many years ago. Maryland is one of the states that uses EZPass, but as Wayne White points out, that state is now going in the other direction when it comes to incentives: it's going to start charging you $1.50/month just for having an EZPass device, whether or not you use it. So, this great device helped ease traffic and should have significantly lowered the costs for the Maryland Transportation Authority, and it's response is to charge everyone for it?

from the it's-all-about-the-money dept

It's not just with red light cameras that local authorities are squeezing extra money out of drivers, Consumerist points us to the news that a judge in Florida has tossed out thousands of bogus toll citations, slamming both the Orlando-Orange County Expressway Authority and Florida Turnpike Authority for failing to deal with the fines properly. It appears that some of the fines resulted from malfunctioning toll transponders. The judge noted that this should have been easy for the traffic authorities to correct, but instead they made it a bureaucratic nightmare for those unfairly and incorrectly accused of running tolls. The judge has even gone so far as to bar the two Authorities from issuing any new citations to drivers who have prepaid or credit-card accounts -- to the point that he's instructed the court clerks in both places to refuse to accept any new citations without affidavits swearing that the offenders have no money in their accounts.

from the abusing-the-system dept

With all the fuss recently over red light cameras, Boing Boing points us to a fascinating story about how somewhere around one million Californians have special license plate that basically shield them from toll booth transponders and red light cameras. Basically, the system was originally designed for police, putting their license plate info in a special secret database to shield home addresses from criminals who might want to hurt them. That system is no longer needed because DMV records are all now private. But one of the unintended consequences of the system was that it became nearly impossible to send a remotely recorded ticket (such as via a toll booth reader or a red light camera) to the guilty party -- since you couldn't get their address. It even works in some cases when people are pulled over by police, because once the plate is looked up the record indicates that the plate is in this protected category, so officers often let the driver off for being "protected."

To make matters worse, California has made it quite easy for state employees of all different types to get their license plate on the list, and from the sound of it, at least a few folks are abusing the privilege. The article found some who owed tens of thousands of dollars in unpaid fines for abusing toll lanes. It seems clear that many state employees are aware of these "benefits." The article notes that museum security guards actually made sure to include a clause in a recent labor agreement that would allow them to get these secret plates. At this point, it would appear there's simply no reason to keep these secret license plates in existence, but they're still there basically just to be used by folks who want to disobey traffic laws and get away with it for free, no matter how often they're caught.